Human Capital and the Future of Transition Economies

Michael Spagat ()

No 3517, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Transition economies have an initial condition of high human capital relative to GDP per capita, giving them high growth potential. In the model, at a good equilibrium a large number of children of well-educated parents take advantage of their family backgrounds and invest substantially in their own human capital. At a bad equilibrium, past educational achievements are wasted as children fail to build upon their parents’ achievements. Policies affecting the education system and the returns to human capital can be decisive in determining the outcome. The model provides a basis for distinguishing development economics from transition economics.

Keywords: development; education; growth; human capital; multiple equilibria; transition (search for similar items in EconPapers)
JEL-codes: D1 I2 J24 O1 O15 P2 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev and nep-lab
Date: 2002-08
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Related works:
Journal Article: Human capital and the future of transition economies (2006)
Working Paper: Human Capital and the Future of Transition Economies (2001)
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